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Although the options market reflects great fear and doubt regarding the advance that has pushed the Standard & Poor's 500 index toward a five-year high, stocks themselves keep rising higher, and momentum trades (synonymous with rolling the dice) are prevalent.

On Monday, when the Standard & Poor's 500 index broke below support at 1500, WebMD's stock was up 6% intraday. The move was tantamount to a salmon swimming upstream past scores of hungry bears. The strength was apparently triggered by a regional bank increasing WebMD's investment rating, but the action in the stock and options market seemed too strong to be solely attributable to the Raymond James upgrade.

Since that day, WebMD's stock and options-trading volume, which are usually quiescent, have been unusually active. And since volume equals conviction, the positive trading patterns in the options market reinforce the idea that WebMD is about to make a big move.

Rather than harnessing WebMD's momentum by buying stock, investors can buy bullish calls. The calls are less expensive than the stock, so less money is risked on this aggressive speculation.

With the stock at about $22, consider buying April $22 calls for $1.20, or April $25 calls for 40 cents. The speculative dynamics are sweetened by favorable options-market conditions suggesting a sharp future stock move.

Many investors are paying top dollar to wager on WebMD. Many of WebMD's out-of-the-money options, which would increase if the stock fell or rose, traded at the asking price—an indication of conviction.

Some wags have suggested that WebMD's stock momentum indicates a takeover target, but who knows? All we do know is that the stock is volatile, and calls are an inexpensive marker on a momentum stock that might surprise to the upside. If you are worried about taking a flier, also buy WebMD's April $17.50 puts, which recently traded for 25 cents, as a cheap hedge in case the momentum trade suddenly reverses.

NOW THAT WE'VE ADDRESSED greed, let's consider fear: Everyone focuses on the CBOE Volatility Index for insights into stock-investor sentiment, but skew is the heart of the matter. Skew measures the difference between the implied volatility of puts and calls above and below a stock's price. Now skew is at high levels, even though the stock market is surging higher. High skew means sophisticated investors are feeling pretty fearful.

Krag Gregory, Goldman Sachs' "vicar of volatility," is telling clients that one-month skew on the Standard & Poor's 500 index is near 12-month highs. This means the cost of buying puts that expire in one month and capture sequestration (and then some) are extraordinarily expensive compared with bullish calls. Conversely, selling puts (which makes sense if you think the stock market will keep advancing), and using the proceeds to buy calls, is extremely attractive. Gregory told clients the funding ratio of the risk-reversal strategy—selling puts to buy calls—is at a decade high. If you have a taste for excitement, few trades offer as much as selling S&P 500 index puts to buy calls to ride the wave higher.

Now, if you consider this trade, we assume you also have heeded our recent exhortations to hedge a decline in the S&P 500—which would allow you to handle the kind of risk that could cause a trader to use WebMD to self-diagnose chest pain, shortness of breath, and a nervous stomach.